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1/8 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 25TH DAY OF JUNE 2018
PRESENT
THE HON’BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON’BLE MRS.JUSTICE S.SUJATHA
I.T.A. No.36/2017
BETWEEN :
GOPAL S. PANDIT PROP. PANDIT DEVELOPERS ‘EMPORIUM’, COMMERCIAL COMPLEX, III FLOOR, OLD PUMP WELL ROAD, KANAKANADY, MANGALORE - 575 002.
...APPELLANT
(BY SRI R.CHANDRASHEKAR, ADV.)
AND :
THE COMMISSIONER OF INCOME TAX, C.R. BUILDING, MANGALORE - 575 001.
THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MANGALORE - 575 001.
…RESPONDENTS
(BY SRI JEEVAN J. NEERALGI, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 27.07.2016 PASSED IN ITA NO.1187/BANG/2013, FOR THE ASSESSMENT YEAR-2006-2007, PRAYING TO 1. FORMULATE SUBSTANTIAL QUESTION OF LAW AS STATED ABOVE. 2. ALLOW THE APPEAL AND MODIFY THE ORDER OF
Date of Judgment 25-06-2018, ITA No.36/2017
Gopal S. Pandit Vs The Commissioner of Income Tax & another .
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THE INCOME TAX APPELLATE TRIBUNAL DATED 27.07.2016 IN ITA NO.1187/BANG/2013 AND DIRECT TO THE SECOND RESPONDENT TO PASS APPROPRIATE ORDER IN ACCORDANCE WITH LAW.
THIS APPEAL COMING ON FOR ADMISSION, THIS DAY, Dr. VINEET KOTHARI, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Mr. R.Chandrashekar, Adv. for Appellant - Assessee Mr. Jeevan R. Neeralgi, Adv. for Respondents – Revenue
In the present Appeal filed by the Assessee against the Order of the learned Income Tax Appellate Tribunal, Annexure-A dated 27.07.2016, the following two purported substantial questions of law have been suggested by the Assessee. I. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was correct in holding that Joint Commissioner while granting an approval u/s.153D of the Act, to an order passed u/s.153A of the Act, no opportunity need to be provided to the Appellant? II. Whether, on the facts and in the circumstances of the appellant’s case, the Appellate Tribunal is right in holding the
Date of Judgment 25-06-2018, ITA No.36/2017
Gopal S. Pandit Vs The Commissioner of Income Tax & another .
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seized material corroborates the income fixed under the head “Pooja” though seized material does not disclose such income from “Pooja”?
As far as first issue is concerned, we have already dismissed the connected Appeal of the Assessee listed today before us, namely, I.T.A. No.34/2017 in the case of 'Gopal. V. Pandit v. The Commissioner of Income Tax & Another’ in which we have held that in the absence of specific provision in Section 153D of the Income Tax Act, 1961, ['Act' for short] the present Authority, namely, Joint Commissioner is not expected to give an opportunity of hearing to the Assessee before giving an approval to the Draft Assessment Order to be passed by the lower Authority, namely, Deputy Commissioner. The relevant portion is quoted below for ready reference. “8. Having heard the learned Counsel for the parties, we are satisfied that the internal guidelines issued by the Central
Date of Judgment 25-06-2018, ITA No.36/2017
Gopal S. Pandit Vs The Commissioner of Income Tax & another .
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Board of Direct Taxes, as urged by the learned Counsel for the Assessee, bereft of the statutory provisions in Section 153D of the Act cannot bind the approving Authority, namely, the Joint Commissioner to comply with the principles of natural justice by the said Authority. The Assessing Authority undoubtedly has of course given adequate and reasonable opportunity of hearing to the Assessee and all objections on merits were considered by him. Merely because, Section 153D of the Act requires a prior approval of the Draft Assessment Order by the higher Authority, namely, the Joint Commissioner in the present case, because the Assessment Order was passed by the Authority below the rank of the Joint Commissioner,
the provisions of the Act do not mandate that a fresh round of opportunity of hearing should be given to the Assessee by such Authority, namely, Joint Commissioner also even for approving Draft Assessment Order. It is not a case where the Assessee did not have any opportunity of hearing before any of the Authorities to defend his case and some
Date of Judgment 25-06-2018, ITA No.36/2017
Gopal S. Pandit Vs The Commissioner of Income Tax & another .
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assessment of tax has been made against him fastening the liability of tax against the Assessee. The Assessing Authority as well as the two Appellate Authorities who have concurrent powers of assessment as are available with the Assessing Authority, have admittedly heard the Assessee on the merits of the case. Therefore, we are of the opinion that no substantial question of law in this regard can be said to be arising on the basis of the office guidelines which are for internal purposes of the Department. They are not even statutory instructions issued u/s. 119 of the Act, which if beneficial to Assessee have been held to be binding on the Authorities of the Department. The Assessee has also not been able to point out any prejudice caused to him on account of approving Authority not giving him an opportunity of hearing.”
Even as far as second question raised before us is concerned, we are of the opinion that the same does not give rise to any substantial question of law as it is a matter of estimate based on the relevant material
Date of Judgment 25-06-2018, ITA No.36/2017
Gopal S. Pandit Vs The Commissioner of Income Tax & another .
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seized during the course of search and the statement recorded of the Assessee u/s. 132[4] of the Act as to what was the income of the Assessee who was working as Priest during the relevant period.
The relevant findings of the learned Tribunal are quoted below for ready reference. “27. We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on record. The first objection by the learned Authorised Representative is that the original assessment was completed under Section 143(3) and that the original assessment was completed under Section 143(3) and in the reassessment under Section 153A, no addition can be made except based on seized material. We find that the Assessing Officer has placed a copy of the seized material at page 10 of the assessment order which clearly shows different entries recorded by the assessee including an entry of Mandir and Pooja of Rs.35 lakhs for the F.Y.2005-06. Therefore, the addition made by the Assessing Officer is not based merely on statement recorded under Section 132(4) of the
Date of Judgment 25-06-2018, ITA No.36/2017
Gopal S. Pandit Vs The Commissioner of Income Tax & another .
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Act. It is pertinent to note that the assessee in the statement had estimated the undisclosed income of Rs.75 lakhs for 3 assessment years under consideration which matches the figures and amounts shown in the seized document relating to Pooja income of Rs.35 lakhs, Rs.20 lakhs and Rs.20 lakhs for the Assessment Year 2006-07 to 2008-09 respectively. We find that there is no ambiguity in the statement of assessee regarding the Pooja income which has been clearly corroborated by the seized material. Thus when there is a sufficient evidence seized material which corroborates the statement of the assessee recorded under Section 132(4) on 23.2.2009 then the subsequent retraction of the statement by the assessee without any corroborating evidence cannot be accepted as the assessee has not explained the statement and how the income shown in the seized material is not correct. Therefore mere retraction of statement without explaining circumstances as well as corroborating evidence, it cannot be accepted being an after thought. Accordingly, we do not find any substance in this ground of the assessee and the same is dismissed.”
Date of Judgment 25-06-2018, ITA No.36/2017
Gopal S. Pandit Vs The Commissioner of Income Tax & another .
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Having heard the learned Counsel for the parties, we are satisfied that no substantial question of law arises. The Appeal of the Assessee is liable to be dismissed and the same is accordingly dismissed. No costs.
Sd/- JUDGE
Sd/- JUDGE
AN/-